The Cannabis Patent Wars Begin

Many patent lawsuits aren’t overly interesting or groundbreaking, they’re just disputes that happen to be way more expensive and often more complicated than other disputes.

But United Cannabis Corporation v. Pure Hemp Collective has the potential to be different. Here is a cannabis patent case being brought in a federal court to enforce patent rights over an activity that is still illegal under federal law.

The Patent:

The patent at issue, U.S. Reg. No. 9,730,911, for CANNABIS EXTRACTS AND METHODS OF PREPARING AND USING SAME, has the following claims (among others):

Patent Claim 20: “A liquid cannabinoid formulation, wherein at least 95% of the total cannabinoids are THC and CBD.”

These surprising patents claims could make for interesting patent lawsuits.

Why are these patents surprising? Doesn’t most every CBD company in existence have a formulation using CBD concentrated to 95% of the total cannabinoids? Surely, most THC extractors are above 95% THC in their extracts and have been at least since as early as when the baby boomers became sophisticated consumers.

The Patent Lawsuit:

It’s likely that this first case is a test case because it seems unlikely that Pure Hemp Collective can mount a significant defense alone.

United Cannabis Corporation (UCANN) asserts that Pure Hemp Collective is infringing the patent and will assert that Pure Hemp Collective should either stop selling the products claimed in the patent or pay a royalty.

There are generally two main disputes in every patent lawsuit: Infringement and Invalidity. Typically, a patent owner brings a claim against an alleged infringer and the two defenses are: (1) we don’t infringe because what we have is different; and (2) we don’t infringe because your patent is invalid. Then the parties fight over both issues.

Patent Infringement:

Here the claims are so broad that there probably won’t be much fighting about infringement. Presumably, the patent owner has tested the alleged infringer’s extract to confirm that at least 95% of the cannabinoid in the alleged infringer’s extract is CBD. If the patent owner’s extract is well above 95%, then there won’t be much to argue about on this point.

Patent Invalidity:

That, then, leaves the argument about whether the patent is invalid.

In order to invalidate this patent, someone will need to show that (1) a formulation existed that meets the elements of the patent claims or that such a formulation would have been obvious or (2) it existed or would have been obvious before the earliest filing date of the patent application. The earliest filing date of the asserted patent was October 24, 2014.

On the one hand, it may be Pure Hemp Collective who goes through its cabinets and shows the court it had this extract before the filing date of this patent. On the other hand, does Pure Hemp Collective have the resources to defend itself?

Cannabis Industry v. UCANN

Alternatively, the whole cannabis industry could unite and attack this patent by pooling both resources and, more importantly, prior art.

There is a procedure at the United States Patent and Trademark Office where an organization can challenge a patent that should not have been granted. The procedure is called an Inter Partes Review, and the basic idea is that anyone can submit a petition to the United States Patent & Trademark Office (“USPTO”) asking the USPTO to invalidate a patent based on patents and printed publications dating before the filing date of the issued patent. The USPTO appoints a panel to review the materials and the submitted petition, and if the panel determines that the materials submitted predate the patent claims and either disclosed the invention or would have made it obvious, then the panel invalidates the patent (or at least any claim that was predated).

The Cannabis industry could unite and beat this patent down.

About Greenspoon Marder

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